IPO Review: DOMS Industries IPO and India Shelter Finance IPO open for subscription today: Which one should you buy?
- DOMS Industries IPO and India Shelter Finance IPO have opened for subscription today. So far DOMS Industries IPO has seen stellar response from investors while the India Shelter Finance IPO is trying to sail through its first day of subscription.
With six IPOs scheduled, including the debut of DOMS Industries and the opening of India Shelter Finance for subscription today, the IPO market is buzzing with activity once more. With the macro environment becoming increasingly busy and the Sensex and Nifty 50 touching all-time highs, investors appear to be extremely overwhelmed and alert about the events unfolding in real time.
From a global standpoint, the Fed's statement tonight will have a significant impact on the direction of the world economy. While the primary market keeps investors busy, markets will wait for the Fed chairman's speech before making a significant move.
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Because they all these IPOs have similar open and close dates and come from different industries, investors are unsure which one to subscribe to or steer clear of. Let's take a look at what the experts have to say.
So far DOMS Industries IPO has seen stellar response from investors while the India Shelter Finance IPO is trying to sail through its first day of subscription.
Here what experts have to say
Mohit Gulati, CIO & Managing Partner of ITI Growth Opportunities Fund
"For DOMS IPO, I can only say, “Make Hay when the Sun is shining!” After the recent success of writing instrument companies, getting a significant player in scholastic stationery to list at the heights of this euphoric bull market is only fair. Businesses like these are, in some ways, similar to staple FMCG- evergreen and unfazed by the usual downhills of macros.
At a PE of 40x+, it’s fairly valued and can surely showcase some listing gains. I would undoubtedly subscribe to this one.
India Shelter, with its 15-state presence to me, is a thinly spread-out HFC. My limited learning in lending businesses is “It’s easy to build a book; difficult to recover it”. For me, promoter holding in the company is too low to draw comfort. That said, from a listing gain perspective, this could be pop, but my pecking order would have DOMS over India Shelter," said Gulati.
Vinit Bolinjkar, Head of Research, Ventura Securities
“One should pick India Shelter Finance IPO over Doms Industries IPO,” said Bolinjkar.
According to Vinit, India Shelter provides home loans and loan against property (LAP) to individuals in tier-II and tier-III regions, catering to both salaried and self-employed clients. With a presence in 15 states and 203 branches, the company manages a total Assets Under Management (AUM) of ₹5,180.7 crore as of September 2023.
In terms of AUM composition, 71% is attributed to self-employed individuals, while the remaining 29% represents salaried individuals. The average loan ticket size is ₹10 lakh. As of September 2023, home loans and LAP constitute 58.2% and 41.8%, respectively, of the total disbursement amounting to ₹1,220.3 crore.
Post-IPO, the company seeks a price-book (P/B) ratio of up to 2.4. In comparison, larger home finance peers such as Aavas Financiers, Aptus Value Housing Finance, and Home First Finance Company trade at P/B ratios of 3.4, 4.5, and 4.7, respectively.
DOMS is engaged in the design, development, manufacturing, and sale of a diverse array of stationery and art products. The company operates both in the domestic market and internationally, serving over 45 countries as of September 30, 2023. They hold the position of being the second-largest player in India's branded 'stationery and art' products market, boasting a market share of approximately 12% by value in Fiscal 2023.
In terms of domestic distribution, DOMS has a robust network for general trade, featuring more than 120 super-stockists, 4,000 distributors, and an efficient sales team comprising over 500 personnel. This dedicated team covers a vast retail landscape, spanning over 120,000 touch points across 3,500 cities and towns.
As of its upper price band, DOMS is valued at a P/E ratio of 34.4x. In comparison, industry peers such as Cello command a P/E ratio of 63x, Flair at 34.4x, and Navneet at 26.5.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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